Symposium: Mandates make martyrs out of corporate owners

Posted Mon, February 24th, 2014 5:03 pm by Ilya Shapiro

Ilya Shapiro is a senior fellow in constitutional studies at the Cato Institute. He filed an amicus brief supporting Hobby Lobby and Conestoga in their respective cases before the Supreme Court. This essay is adapted from his foreword to Eugene Volokh, Sebelius v. Hobby Lobby: Corporate Rights and Religious Liberties (Cato Press, forthcoming 2014). Shapiro is neither religious nor has a moral objection to the contraceptives at issue – but most government mandates do offend him.

Should some people be exempt from laws that generally apply to everyone but infringe on sincerely held religious beliefs? If so, doesn’t that privilege believers over nonbelievers, and indeed pick and choose among religious tenets to determine which merit accommodation? Does it matter if the religious belief in question relates strictly to worship or is tied to an otherwise secular mission, such as the provision of education or social-welfare services? What about commercial activity, and do the legal forms in which that activity is pursued matter? These are some of the thorny questions that arise when a pluralistic society tries to reconcile the rule of law with religious liberty.

Through most of American history, religious objectors only got relief if the law explicitly provided it to them. For example, Quakers were historically exempt from the military draft. In the 1960s, however, the Supreme Court began recognizing constitutionally required exemptions. That experiment only lasted until 1990, when, in a controversial opinion by Justice Antonin Scalia, the Court ruled that generally applicable laws were constitutionally valid if they don’t specifically discriminate against religious people. If objectors wanted an exemption, they would have to seek it from the legislature.

Criticism of the decision came from all sides; nobody on any part of the political spectrum was too pleased with the new rule regarding religious (non-)accommodation. Accordingly, Congress passed the Religious Freedom Restoration Act of 1993, which created a presumptive statutory exemption from generally applicable laws, subject to the government’s showing that the burden it imposed on believers was “the least restrictive means of furthering [a] compelling governmental interest.” It’s strange to imagine two decades hence, but RFRA passed the House unanimously and by a vote of ninety-seven to three in the Senate.

The Supreme Court would strike down RFRA’s application to the states – causing a number of states to pass their own religious-freedom legislation – but in an important 2006 ruling upheld it against the federal government. So that’s where things stood when the Affordable Care Act came along. Given Obamacare’s myriad constitutional and civil rights violations, it should be no surprise that it’s the cause of the latest legal battle involving government intrusion on religious liberty.

There are now about forty contraceptive-mandate cases around the country, not counting those involving religious nonprofits like Little Sisters of the Poor. Here’s some background on the one that won the race to the Supreme Court: In 1970, David Green founded Hobby Lobby, a picture-frame company, in his Oklahoma City garage. Since then, the company has grown into a leader in the arts-and-crafts retail industry, with 588 stores and around 13,000 employees across the United States.

Ever since Hobby Lobby’s founding, the Greens have managed their company in accordance with their Christian principles. For example, Hobby Lobby closes on Sunday, doesn’t sell shot glasses, takes out ads suggesting that readers seek Jesus, and refuses to “back-haul” beer on its trucks, foregoing considerable profits. It’s certainly true that the Hobby Lobby corporation doesn’t have knees to pray on or a soul to save, but it’s hard to say that it doesn’t operate according to certain religious ideals.

Following in his father’s footsteps, Mart Green also founded a business, a chain of Christian bookstores called Mardel, of which he remains CEO. In the Green family tradition, and perhaps even more obviously to the casual observer, Mardel too is managed in accordance with Christian values.

Thanks to Obamacare, however, the Greens are forced to choose between running their businesses in direct contravention of their religion or running them into the ground. Deep in the law’s thousands of pages is a requirement that companies with more than fifty employees provide coverage in their group health plans for certain medical services or face severe penalties. These mandated services, as defined by the Health and Human Services Department’s subsequent regulation, include twenty methods of contraception, four of which function by preventing the implantation of a fertilized egg.

Among the religious tenets that have guided the Green family’s spiritual lives and business decisions, however, is the idea that life begins when sperm fertilizes an egg. They are morally opposed to contraceptives that prevent implantation and thus destroy life. The Greens believe that being required to provide health insurance that facilitates the use of such contraceptives is a substantial burden on their right to exercise their religion under RFRA, as well as under the First Amendment’s Free Exercise Clause.

In Cato’s amicus brief, we argue that people should be able to order their professional lives according to their religious beliefs, that engaging in business doesn’t demand the surrender of religious freedom, and that there’s nothing inherent in the corporate form that requires denying the owners of a corporation the right to direct their business in a manner that comports with their religion.

After all, a corporation is a legal fiction created to foster economic activity, not a construct to shelter business conduct from the influence of religious faith. There’s nothing to suggest that Congress, in passing legislation to broaden the protection of religious liberty, intended to restrict the religious liberties individuals enjoy in their business affairs based solely on how those affairs are organized under civil law. The contraceptive-mandate cases thus offer the Supreme Court an opportunity to clarify that compulsion of a corporation – especially a closely held corporation – can amount to a substantial burden on the rights of its owners.

The fallacy in the government’s argument is its assumption that a corporation’s distinct legal status precludes a personal dimension to corporate decision-making. The reality is that any organization can act only at the direction of human beings. In a very real sense, the compulsion of a corporation is felt by the individuals who direct its affairs.

These individuals don’t check their religious values at the office door. Indeed, the Supreme Court has recognized repeatedly that an individual may exercise religion in virtually every phase of life. For many people, religion determines the school they attend, the food they eat, the person they marry, and the place they work. Rather than restrict free exercise rights to any particular activity, the Court has sensibly determined that people engage in the exercise of religion whenever their actions are “rooted in religious belief.”

Inevitably, a great deal of religiously motivated action occurs in the workplace. Corporate decision-makers are often faced with moral choices – ranging from wages to competitive practices – that squarely implicate religious teachings. And when these officials believe they’re bound by faith to steer their company in a particular direction, that action is plainly “rooted in” the individual’s “religious belief.”

The government can’t force individuals to forfeit their free exercise rights when they incorporate a business – just as it can’t force them to forsake these liberties when they enter the workforce, attend school, or engage in any other secular pursuit. More to the point, there’s nothing about the act of incorporation that amounts to a waiver of individual free exercise rights.

These are important cases because the corporate form is an essential tool for operating successfully in the complex modern economy and the right to exercise one’s religion – even through one’s business – is an essential right in a free nation. Nobody should have to choose between the two.

Indeed, it would be odd to say that a for-profit business can’t exercise religious freedom; think of a kosher butcher. It would similarly be strange to think that such a business loses that freedom if it incorporates – as if individual rights change depending on the legal structures through which they’re channeled. After all, the Supreme Court has held (and the government doesn’t dispute) that for-profit businesses and non-profit corporations can have religious-liberty interests. So is the only difference here that it’s a for-profit corporation? But why should the IRS’s treatment of an organization’s revenue stream affect religious liberty one way or another? Regardless of any technical legal arguments, Hobby Lobby boils down to the government’s wanting to force people to do something that’s against their religion; it’s ultimately the Greens – not some inanimate corporate structure – who will either be facilitating the use of objectionable contraceptives or paying the regulatory fines.

Americans understand intuitively that the essence of religious freedom is that government can’t willy-nilly force people to do things that violate their religious beliefs. Some may argue that there’s a conflict here between religious freedom and women’s rights, but that’s a “false choice” (as the president likes to say). Without the HHS rule, women will still be free to obtain contraceptives, abortions, and whatever else isn’t illegal. They just won’t be able to force their employer to pay for them.

Moreover, while the focus of the contraceptive-mandate cases is the intersection of corporate rights and religious liberties, there’s a bigger issue here. This is just the latest example of the difficulties inherent in turning health care – or increasingly our economy more broadly – over to the government. As my colleague Roger Pilon has written, when something is socialized or treated as a public utility, we’re forced to fight for every “carve-out” of liberty. Those progressive Catholics who supported Obamacare – and the pro-life Democrats who voted for it – who are now appalled by certain HHS rules should have thought of that before they used the government to make us our brother’s keeper.

The more government controls – whether health care, education, or even marriage – the greater the battles over conflicting values. With certain things, such as national defense, basic infrastructure, clean air and water and other “public goods,” we largely agree, at least inside reasonable margins. But we have vast disagreements about social programs, economic regulation, and so much else that government now dominates at the expense of individual liberty. Those supporting Hobby Lobby and Conestoga are rightly concerned that people are being forced to do what their religious beliefs prohibit. But that all comes with the collectivized territory.

Current Relists

Conference of November 16, 2018

Andersen v. Planned Parenthood of Kansas and Mid-Missouri Whether the provisions of the Medicaid Act that require participating states to include in their plans the ability of eligible individuals to obtain services from any “qualified” provider, 42 U.S.C. § 1396a(a)(23), but grant states broad authority to exclude providers for violating state or federal requirements, 42 U.S.C. § 1396a(p), indicate that Congress clearly and unambiguously intended to create an implied private right of action to challenge a state’s determination that a provider is not “qualified” under the applicable state regulations.

City of Escondido, California v. Emmons (1) Whether the U.S. Court of Appeals for the 9th Circuit erred in denying the officers qualified immunity by considering clearly established law at too high a level of generality rather than giving particularized consideration to the facts and circumstances of this case; (2) whether the lower court erred in denying the officers qualified immunity by relying on a single decision, published after the event in question, to support its conclusion that qualified immunity is not available; and (3) whether the lower court erred in failing or refusing to decide whether the subject arrest was without probable cause or subject to qualified immunity.

Fleck v. Wetch (1) Whether it violates the First Amendment for state law to presume that the petitioner consents to subsidizing non-chargeable speech by the group he is compelled to fund (an “opt-out” rule), as opposed to an “opt-in” rule whereby the petitioner must affirmatively consent to subsidizing such speech; and (2) whether Keller v. State Bar of California and Lathrop v. Donohue should be overruled insofar as they permit the state to force the petitioner to join a trade association he opposes as a condition of earning a living in his chosen profession.

Major Cases

In re Department of CommerceWhether, in an action seeking to set aside agency action under the Administrative Procedure Act, 5 U.S.C. § 701 et seq., a district court may order discovery outside the administrative record to probe the mental processes of the agency decisionmaker—including by compelling the testimony of high-ranking Executive Branch officials—when there is no evidence that the decisionmaker disbelieved the objective reasons in the administrative record, irreversibly prejudged the issue, or acted on a legally forbidden basis.

The American Legion v. American Humanist Association(1) Whether a 93-year-old memorial to the fallen of World War I is unconstitutional merely because it is shaped like a cross; (2) whether the constitutionality of a passive display incorporating religious symbolism should be assessed under the tests articulated in Lemon v. Kurtzman, Van Orden v. Perry, Town of Greece v. Galloway or some other test; and (3) whether, if the test from Lemon v. Kurtzman applies, the expenditure of funds for the routine upkeep and maintenance of a cross-shaped war memorial, without more, amounts to an excessive entanglement with religion in violation of the First Amendment.

Gamble v. United StatesWhether the Supreme Court should overrule the “separate sovereigns” exception to the double jeopardy clause.

Timbs v. IndianaWhether the Eighth Amendment’s excessive fines clause is incorporated against the states under the Fourteenth Amendment.

Apple Inc. v. PepperWhether consumers may sue anyone who delivers goods to them for antitrust damages, even when they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense.